Black Redlining Expert Faces Appraisal Bias

Johns Hopkins’ Nathan Connolly (John Hopkins, Getty)

An Black expert in redlining was himself the subject of racial discrimination in the housing market, according to a lawsuit filed this week.

Johns Hopkins University history professor Nathan Connolly and his wife, Shani Mott, are suing lender loanDepot, 20/20 Valuations and appraiser Shane Lanham for alleged discrimination, the New York Times reported. The suit stems from a big disparity in appraisals for the couple’s Baltimore home.

The couple aimed to refinance their mortgage last summer to take advantage of the low interest rates. They paid $450,000 for the home in 2017 and had since made $42,000 in renovations and upgrades.

Lanham, the owner of 20/20 Valuations, appraised the home for just $472,000, much less than the couple expected. The result: loanDepot denied a refinance loan.

Months later, the couple applied for another loan, this time with Swift Home Loans, but made a few changes. They removed photographs of their family and Connolly’s white colleague from the university posed as the homeowner.

It was appraised for $750,000 – almost 60 percent more.

“We were clearly aware of appraisal discrimination,” Connolly told the publication. “But to be told in so many words that our presence and the life we’ve built in our home brings the property value down? It’s an absolute gut punch.”

The couple noted in the lawsuit that the family photos and posters in the home clearly pointed towards their race. They also accused Lanham of selecting poor comparisons to help with the valuation and making outsized reductions for factors such as a busy street.

The Biden administration unveiled a five-point plan in March to tackle racial bias in home lending and appraisals. Steps include giving appraisers clear direction about anti-discrimination laws and strenghtening enforcement of violations.

The administration’s task force also wants to diversify the appraisal workforce, which is 97 white.

— Holden Walter-Warner